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Auditor Report of Gujarat Apollo Industries Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial statements of GUJARAT APOLLO INDUSTRIES LIMITED ("the company"), which comprise the Balance Sheet as at 31 March 2015, the Profit and Loss Statement, The Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Reponsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstance but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the company's Directors, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2015;

b) In the case of the Profit and Loss Statement, of the loss for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirement

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance sheet, the Profit and Loss Statement and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) on the basis of the written representations received from the Directors as on 31st March 2015 , Taken on record by the Board of Directors, we report that none of the Director is disqualified as on 31st March 2015 , from being appointed as a Director in terms of Section 164 (2) of the Act.

(f) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements ;

ii. In our opinion and as per the information and explanation provided to us the Company has not entered into any long-term contracts including derivatives contract, requiring provision under applicable laws or accounting standards, for material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

Report under The companies (Auditor's Report) Order, 2015 (CARO 2015)

CARO 2015 Report on the Standalone financial statement of Gujarat Apollo Industries limited for the year ended March 31, 2015 as referred to in clause 1 of the Report on Other Legal and Regulatory requirements:

1) In respect of Fixed assets:

a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such physical verification.

2) In respect to its Inventories:

(a) As explained to us, inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation to the size of the company and the nature of the Business.

(c) The company has maintained proper records of inventory. As per information and explanation given to us, no material discrepancies were noticed on physical verification.

3) In respect of the loans, secured or unsecured, granted by the company to companies, firm or other parties covered in the register maintained under section 189 of the companies act, 2013:

a) The principal amount is repayable on demand, while the interest is also payable on demand, both at the discretion of the company.

b) In respect of the said loan and interest thereon, there are no overdue amounts.

4) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with its size of the company and the nature of its business with regard to the purchase of inventory, fixed assets and for the sale of goods and service. During the course of our audit, we have not observed any continuing failure to correct major weakness in such internal control system.

5) In our opinion and according to the information and explanation given to us, the Company has complied with the provision of section 73, section 76 and other relevant provision of the Company Act, 2013 and the companies (Acceptance of Deposits) Rules,2014 with regard to deposits accepted from the member and the public. No order has been passed by the National Company Law Tribunal or any court or any other tribunal with regard to deposits.

6) We have been informed by the management, no cost records have been prescribed under Section 148(1) of the companies Act, 2013 in respect of product manufactured by the company.

7) In respect of statutory dues:

(a) According to the records of the Company, undisputed statutory dues including provident fund, Employees' state insurance income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid due were outstanding as at 31 March 2015 for a period of more than six months from the date of becoming payable.

(b) Details of dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited 31st march 2015 on account of any dispute are given below.

Nature of Nature of For the the Statute Dispute Year

Central Sales Tax and Sales Tax 1997-1998 Commercial Tax of Sales Tax 2005-2008 Gujarat Sales Tax 2005-2006

Sales Tax 2009-2010

Sales Tax 2010-2011

Total

Service Tax Act Service Tax 2005-2009

Total

Central Excise Act, 1944 Excise Duty Difference

Total

TDS TDS 2007-08 to 2012-13

TOTAL

Nature of the Statute Amount (Rs.) Authority

Central Sales Tax and Commercial Tax of Gujarat 10.35 Lacs Second Appellate (Hyderabad)

110.86 Lacs Commissioner (Appeals)

47.45 Lacs Joint Commissioner (Appeals)

92.78 Lacs Joint Commissioner (Appeals)

10.68 Lacs

Total 261.44 Lacs

Service Tax Act 20.51 Lacs Custom Excise & Service Tax (Appellate Tribunal)

Total 20.51 Lacs

Central Excise Act, 1944 9.15 Lacs Custom Excise & Service Tax (Appellate Tribunal)

Total 9.15 Lacs

TDS 25.26 Lacs TDS CPC

TOTAL 25.26 Lacs

c. According to the records of the company the amounts required to be transferred to the Investor Education Protection Fund have been duly transferred within time in accordance with the relevant provision of the Companies Act, 1956 (1 of 1956) and rules made there under.

(8) The accumulated losses of the company are not more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and has not incurred cash losses immediately preceding financial year.

(9) Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that company has not defaulted in the repayment of dues to financial institution and bank. Since the company has not issue any debenture the question of default in repayment of due to debenture holder does not arise.

(10) According to the records of the company and the information and explanations given By the management, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(11) The Company has not raised new term loan during the year.

(12) In our opinion and according to the information and explanation given to us, no fraud by the company and no material fraud on the company has been noticed or reported during the year.

For, DJNV & Co.

Firm Registration Number: 115145W

Chartered Accountants

Date : 30.05.2015 (Vasant Patel)

Place : Ahmedabad Partner

Membership No. 044612


Mar 31, 2014

1. We have audited the accompanying Financial Statements of Gujarat Apollo Industries Limited which comprise the Balance Sheet at 31st March 2014 ,Statement of Profit and Loss for the year ended on that date, Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory informations, which we have signed under reference to this report.

Management''s Reponsibility

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow of the Company in accordance with the Accounting Standard notified under the companies act 1956 of Inida (the Act) read with general circular 15 / 2013 dated 13th September 2013 of the ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013. This responsibility includes the design implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or errors.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the institute of Chartered Accountants of India. Those standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free form material misstatement.

4. An audit involves performing procedures to obtain about amounts and disclosures in the financial statements. The procedures selected depends on auditor''s judgement, including assessment of risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the accompanying financial statements give the information required by the act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2014.

b. in the case of the statement of Profit and Loss, of the profit for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flow for the year ended on that date

Report on Other Legal and Regulatory Requirement

7. As required by the Companies (Auditor''s Report) Order, 20031, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such chekcs of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the order.

8. As required by the section 227 (3) of the Act, we report that;

a. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit.

b. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

c. The Balance Sheet and the Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under companies act 1956 read with the general circular 15/2013 dated 13th September 2013 of the ministries of corporate affairs in respect of section 133 of companies act 2013;

e. On the basis of written representation received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, we report that none of the director is disqualified as on March 31, 2014 from being appointed as a director in terms of section 274(1)(g) of the Act.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 7 of our report of even date)

(i) In respect of its fixed assets;

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b. According to the information and explanations given to us, the Company has formulated a program of verification by which, all the assets of Company are being verified in the phased manner over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets .No material discrepancies were noticed on verification conducted during the period as compared with the books records.

c. In our opinion the Company has disposed off substantial part of its fixed assets through slump sale during the year, but the going concern status of the Company is not affected.

(ii) In respect of its inventories:

a. As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion and according to the information and explanations give to us, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and accordingly to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

(iii) In respect of the loans, secured or unsecured granted or taken by the company to/from: Companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

a. The Company has given interest-bearing loan to a party & interest free loan to a party. In respect of said loans, the maximum amount outstanding at any time during the year is Rupees 10216.66 lacs and year-end balance is Rupees 10216.66 lacs.

b. In our opinion and according to information and explanation given to us, the rate of interest and other terms and condition of the loans given are not prima facie prejudicial to the interest of the company.

c. In respect of the above loan granted there is no stipulation as regard receipt/renewal of the principal amount.

d. In respect of the loan given by the company, the same is repayable on demand and therefore the question of overdue amount does not arise.

e. The Company has not taken any loans secured or unsecured, from companies, firms or other parties, covered in the register maintained under section 301 of the companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of the order are not applicable to the company and hence not commented upon.

(iv) In our opinion and according to the information and explanations give to us, having regard to the explanation that certain items purchased are of specialized nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and with regards to the sale of goods and services. During the course of our audit we have not observed any major weakness in the internal control

(v) a. In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements refer to in section 301 of the Act, have been entered in the register required to be maintained under that section.

b. In our opinion and having regard to our comments in paragraph (iv) above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956. in respect of one of the party to whom slump sales have been made is as per the business transfer agreement and hence not comparable. In respect of the other transactions they have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

(vi) In our opinion and according to the information and explanations give to us, the Company has complied with the provisions of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order under the aforesaid Sections has been passed by the Company Law Board, National Law Tribunal, National Law Board or Reserve Bank of India or any other court or any other tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act,1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us In respect of statutory dues:

a. The Company is generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues applicable to it.

b. No undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, at the year end for a period of more than six months from the date they become payable.

c. Details of dues of sales tax, income tax, custom duty, wealth tax, excise duty, service tax which have not been deposited as on 31st March, 2014 on account of any disputes are given below;

Nature of the Statute Nature of Dispute For the Year

Central Sales Tax and Sales Tax 1997-1998 Commercial Tax Gujarat Sales Tax 2005-2008 Sales Tax 2005-2006 Sales Tax 2009-2010

Service Tax Act Service Tax 2005-2009

Central Excise Act, 1944 Excise Duty Difference

Nature of the Statute Amount (Rs.) Authority

Central Sales Tax and 10.35 Lacs Second Appellate (Hyderabad) Commercial Tax Gujarat 110.86 Lacs Commissioner Appeals 47.45 Lacs Joint Commissioner Appeals 92.78 Lacs Joint Commissioner Appeals

Total 261.44 Lacs

Service Tax Act 20.51 Lacs Custom Excise & Service Tax Appellate Tribunal

Total 20.51 Lacs

Central Excise Act, 1944 9.15 Lacs Custom Excise & Service Tax Appellate Tribunal

Total 9.15 Lacs

(x) The Company does not have any accumulated losses at the end of the financial year and it has not incurred any cash losses during the current financial year and immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

(xii) Based on our examination of the records and the information and explanations give to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(xv) In our opinion and according to the information and explanation given to us, the Company has not given any bank guarantee.

(xvi) In our opinion, and according to the information and explanation given to us, the term loans have been applied for the purposes for which they were obtained.

(xvii) According to the information and explanations given to us, and on overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us, the Company has not issued any debenture during the year and no outstanding at the year end.

(xx) As informed to us, during the period covered by our audit report, the Company has not raised any money by public issues.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true end fair view of the financial statements and as per the information and explanations given by the management, which have been relied upon by us, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For, DJNV & Co. Firm Registration Number: 115145W Chartered Accountants Date : 30.05.2014 (Vasant Patel) Place : Mehsana Partner Membership No. 044612


Mar 31, 2013

Report on Financial Statement

1. We have audited the accompanying Financial Statements of Gujarat Apollo Industries Limited which comprise the Balance Sheet at 31st March 2013, Statement of Profit and Loss for the year ended on that date, Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory informations, which we have signed under reference to this report.

Management''s Reponsibility

2. The Company''s Management is responsible for the preperation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow of the Company in accordance with the Accounting Standard referred to in section 211(3C) of the Companies Act 1956 of Indai (the "Act"). This responsibility includes the design implementation and maintenance of internal control relevant to the preperation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or errors.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these finincial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institue of Chartered Accountants of India. Those standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free form material misstatement.

4. An audit involves performing procedures to obtain about amounts and disclosures in the financial statements. The procedures selected depends on auditor''s judgement, including assessment of risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to company''s preperation and fair presentation of the financial statements in order to design audit procedures that are apporpriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

5. We belive that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

6. In our opinion and to the best of our information and according to the explainations given to us, the accompanying financial statements give the information required by the act in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2013.

b. in the case of the statement of Profit and Loss, of the profit for the year endend on that date; and

c. in the case of the Cash Flow Statement, of the cash flow for the year endend on that date

Report on Other Legal and Regulatory Requirement

7. As required by the Companies (Auditor''s Report) Order, 2003'', as amended by the Companies (Auditors Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such chekcs of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the order.

8. As required by the section 227 (3) of the Act, we report that;

a. We have obtained all the information and explainations which, to the best of our knowledge and belief, were necessary for the purpose of our audit.

b. In our opinion, proper books of account as requird by law have been kept by the company so far as appears from our examination of those books;

c. The Balance Sheet and the Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this report comply with the Accounting Standards referd to in section 211(3C) of the Act;

e. On the basis of written representation received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, we report that none of the director is diaqualified as on March 31, 2013 from being appointed as a director in terms of section 274(1)(g) of the Act.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 7 of our report of even date)

(i) In respect of its fixed assets;

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b. According to the information and explanations given to us, the Company has formulated a program of verification by which, all the assets of Company are being verified in the phased manner over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets .No material discrepancies were noticed on verification conducted during the period as compared with the books records.

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories:

a. As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable.

b. In our opinion and according to the information and explanations give to us, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and accordingly to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

(iii) In respect of the loans, secured or unsecured granted or taken by the company to/from: Companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

a. The Company has given interest-bearing loan to a party & interest free loan to a party. In respect of said loans, the maximum amount outstanding at any time during the year is Rs. 4,575.11 lacs and year-end balance is Rs. 4,575.11 lacs.

b. In our opinion and according to information and explanation given to us, the rate of interest and other terms and condition of the loans given are not prima facie prejudicial to the interest of the company.

c. In respect of the above loan granted there is no stipulation as regard receipt/renewal of the principal amount.

d. In respect of the loan given by the company, the same is repayable on demand and therefore the question of overdue amount does not arise.

e. The Company has not taken any loans secured or unsecured, from companies, firms or other parties, covered in the register maintained under section 301 of the companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of the order are not applicable to the company and hence not commented upon.

(iv) In our opinion and according to the information and explanations give to us, having regard to the explanation that certain items purchased are of specialized nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and with regards to the sale of goods and services. During the course of our audit we have not observed any major weakness in the internal control

(v) a. In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements refer to in section 301 Act, have been entered in the register required to be maintained under that section.

b. In our opinion and having regard to our comments in paragraph (iv) above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

(vi) In our opinion and according to the information and explanations give to us, the Company has complied with the provisions of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order under the aforesaid Sections has been passed by the Company Law Board, National Law Tribunal, National Law Board or Reserve Bank of India or any other court or any other tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act,1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us In respect of statutory dues:

a. The Company is generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues applicable to it.

b. No undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, at the year end for a period of more than six months from the date they become payable.

(x) The Company does not have any accumulated losses at the end of the financial year and it has not incurred any cash losses during the current financial year and immediately preceding financial year.

(xi) Based on the audit procedures applied by us, and explanations provided by the management, the company has no dues towards banks, financial institutions or debenture holders, and hence, provisions of clause 4(xi) of the order are not applicable to the company.

(xii) Based on our examination of the records and the information and explanations give to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(xv) The Company has given the guarantee for loans taken by one of the subsidiary from other bank. According to the information explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

(xvi) The Company has not obtained any term loan during the year.

(xvii) According to the information and explanations given to us, and on overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment by the Company and vice-versa.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us, the Company has not issued any debenture during the year and no outstanding at the year end.

(xx) As informed to us, during the period covered by our audit report, the Company has not raised any money by public issues.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true end fair view of the financial statements and as per the information and explanations given by the management, which have been relied upon by us, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For, Arvind A Thakkar & Co.

Firm Registration Number: 100571W

Chartered Accountants

Date : 30.05.2013 A. A. Thakkar Place : Mehsana Sole Proprietor

Membership No. 014334


Mar 31, 2012

1. We have audited the attached Balance Sheet of GUJARAT APOLLO INDUSTRIES LIMITED as at 31st March 2012 and also the Statement of Profit and Loss and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Statement Profit and Loss and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to the sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of written representations received from the Directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 271 of the Companies Act, 1956; and in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

b) in the case of Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

(i) In respect of its fixed assets;

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) According to the information and explanations given to us, the Company has formulated a program of verification by which, all the assets of Company are being verified in the phased manner over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets .No material discrepancies were noticed on verification conducted during the period as compared with the books records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories:

(a) As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanations give to us, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and accordingly to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

(iii) In respect of the loans, secured or unsecured granted or taken by the Company to/from: Companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

a) The Company has given interest-bearing loan to three parties & interest free loan to one party. In respect of said loans, the maximum amount outstanding at any time during the year is Rs. 2672.81 Lacs and year-end balance is Rs. 2569.03 Lacs.

b) In our opinion and according to information and explanation given to us, the rate of interest and other terms and condition of the loans given are not prima facie prejudicial to the interest of the Company.

c) In respect of the above loan granted there is no stipulation as regard receipt/renewal of the principal amount.

d) In respect of the loan given by the Company, the same is repayable on demand and therefore the question of overdue amount does not arise.

e) The Company has not taken any loans secured or unsecured, from Companies, firms or other parties, covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of the order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations give to us, having regard to the explanation that certain items purchased are of specialized nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and with regards to the sale of goods and services. During the course of our audit we have not observed any major weakness in the internal control. (v) (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements refer to in section 301 Act, have been entered in the register required to be maintained under that section. (b) In our opinion and having regard to our comments in paragraph (iv) above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available. (vi) In our opinion and according to the information and explanations give to us, the Company has complied with the provisions of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order under the aforesaid Sections has been passed by the Company Law Board, National Law Tribunal, National Law Board or Reserve Bank of India or any other court or any other tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act,1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us In respect of statutory dues:

(a) The Company is generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues applicable to it.

(b) No undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, at the year end for a period of more than six months from the date they become payable.

(c) Details of dues of sales tax, income tax, custom duty, wealth tax, excise duty, service tax which have not been deposited as on 31st March, 2012 on account of any disputes are given below;

NATURE OF FOR THE YEAR AMOUNT (Rs.) AUTHORITY DISPUTE

1) Sales Tax 1997-98 10.35 Lacs Second Appellate (Hyderabad)

2) Service Tax 2005-2008 110.86 Lacs Commissioner Appeals

3) Service Tax 2005-2009 20.51 Lacs Custom Excise & Service Tax Appellate Tribunal

4) Service Tax 2006-2009 51.62 Lacs Commissioner Appeals

5) Excise Duty Difference 9.15 Lacs Custom Excise & Service Tax Appellate Tribunal

(x) The Company does not have any accumulated losses at the end of the financial year and it has not incurred any cash losses during the current financial year and immediately preceding financial year.

(xi) Based on the audit procedures applied by us, and explanations provided by the management, the company has no dues towards banks, financial institutions or debenture holders, and hence, provisions of clause 4(xi) of the order are not applicable to the company.

(xii) Based on our examination of the records and the information and explanations give to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) The Company has given the guarantee for loans taken by one of the subsidiary from other bank. According to the information explanation given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

(xvi) The Company has not obtained any term loan during the year.

(xvii) According to the information and explanations given to us, and on overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment by the Company and vice-versa.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us, the Company has not issued any debenture during the year and no outstanding at the year end.

(xx) As informed to us, during the period covered by our audit report, the Company has not raised any money by public issues.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true end fair view of the financial statements and as per the information and explanations given by the management, which have been relied upon by us, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

FOR ARVIND A THAKKAR & CO.

Chartered Accountants

Firm Reg. No. 100571W

Place : Ditasan, Mehsana A.A. THAKKAR

Dated: 11th August, 2012 Sole Proprietor

Membership No.14334


Mar 31, 2011

1. We have audited the attached Balance Sheet of GUJARAT APOLLO INDUSTRIES LIMITED as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii. in our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii. the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv. in our opinion, the Balance Sheet, Profit and Loss and Cash Flow Statement dealt with by this report are in compliance with the accounting standards referred to the sub-section (3C) of Section 211 of the Companies Act, 1956;

v. on the basis of written representations received from the directors, as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

b) in the case of Profit and Loss Account, of the profit for the year ended on that date; and

c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of our report of even date)

(i) In respect of its fixed assets;

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Company has formulated a programme of verification by which, all the assets of Company are being verified in the phased manner over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets .No material discrepancies were noticed on verification conducted during the period as compared with the books records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories:

(a) As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanations give to us, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and accordingly to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

(iii) In respect of the loans, secured or unsecured granted or taken by the company to/from:

Companies, firm or other parties covered in the register maintained under section 301 of The Companies Act, 1956

a) The Company has given interest-bearing loan to three parties & interest free loan to one party. In respect said loan the maximum amount outstanding at any time during the year is Rupees 3407.39 lacs and year- end balance is Rupees 2543.51 lacs.

b) In our opinion and according to information and explanation given to us, terms and condition are not prima facie prejudicial to the interest of the company.

c) The said loan was given to associate parties of the company are repayable on demanded there is no repayment schedule.

d) In respect of the loan given by the company, the same is repayable on demand and therefore the question of overdue amount does not arise.

e) The Company has not taken any loan, secured or unsecured from companies, firm or other parties covered in the register maintained under section 301 of the companies Act, 1956.

(iv) In our opinion and according to the information and explanations give to us, having regard to the explanation that certain items purchased/sold are of specialized nature for which suitable alternative sources are not readily available for obtaining comparative quotations/prices, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control.

(v) In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) To the best of our knowledge and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and having regard to our comments in paragraph (iv) above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

(vi) In our opinion and according to the information and explanations give to us, the Company has complied with the provisions of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order under the aforesaid Sections has been passed by the Company Law Board on the Company.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

(ix) In respect of statutory dues:

(a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, customs duty and excise duty. were outstanding, at the year end for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, details of dues of sales tax and Service Tax which have not been deposited on account of dispute are as under;

NATURE OF DISPUTE FOR THE YEAR AMOUNT (Rupees) AUTHORITY

1) Sales Tax 1997-98 10.35 Lacs Second Appellate (Hyderabad)

2) Service Tax 2005-2006 & 29.78 Lacs Service Tax Appellate 2006-2007 Tribunal West zone (Ahmedabad)

(x) The Company does not have any accumulated losses at the end of the financial year and it has not incurred any cash losses during the current financial year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us the company has not defaulted in repayment of dues to banks. hence, provisions of clause 4(xi) of the order are not applicable to the company.

(xii) Based on our examination of the records and the information and explanations give to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order. 2003 are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by subsidiary company from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

(xvi) The Company has not obtained any term loan during the year.

(xvii) According to the information and explanations given to us, and on overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment by the Company and vice-versa.

(xviii) The Company has made not made any preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act, 1956. .

(xix) According to the information and explanation given to us, the Company has not issued any debenture during the year and no outstanding at the year end.

(xx) As informed to us, during the period covered by our audit report, the Company has not raised any money by public issues.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true end fair view of the financial statements and as per the information and explanations given by the management, which have been relied upon by us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

FOR, ARVIND A THAKKAR & CO.

Chartered Accountants

Firm Reg. No. 100571W

Place:Ditasan, Mehsana A.A. THAKKAR

Dated:12th August, 2011 Sole Proprietor

Membership No.14334












Mar 31, 2010

1. We have audited the attached Balance Sheet of GUJARAT APOLLO INDUSTRIES LIMITED as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii. in our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii. the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv. in our opinion, the Balance Sheet, Profit and Loss and Cash Flow Statement dealt with by this report Company with the accounting standards referred to the sub-section (3C) of Section 211 of the Companies Act, 1956;

v. on the basis of written representations received from the directors, as on March 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 271 of the Companies Act, 1956; and

vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March , 2010;

b) in the case of Profit and Loss Account, of the profit for the year ended on that date; and

c) in the case of the cash flow statement, of the cash flows for the year ended on the date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

(i) In respect of its fixed assets;

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Company has formulated a programme of verification by which, all the assets of Company are being verified in the phased manner over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on verification conducted during the period as compared with the books records.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories:

(a) As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanations give to us, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and accordingly to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

(iii) In respect of the loans, secured or unsecured granted or taken by the company to/from:

Companies, firm or other parties covered in the register maintained under section 301 of The Companies Act, 1956

a) The Company has given interest-bearing loan to two parties & interest free loan to one party. In respect said loan the maximum amount outstanding at any time during the year is Rupees 3336.33 lacs and year- end balance is Rupees 3066.28 lacs.

b) In our opinion and according to information and explanation given to us, terms and condition are not prima facie prejudicial to the interest of the company.

c) The said loan was given to associate parties of the company are repayable on demanded there is no repayment schedule.

d) In respect of the loan given by the company, the same is repayable on demand and therefore the question of overdue amount does not arise.

e) The Company has not taken any loan, secured or unsecured from companies, firm or other parties covered in the register maintained under section 301 of the companies Act, 1956.

(iv) In our opinion and according to the information and explanations give to us, having regard to the explanation that certain items purchased are of specialized nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regards to the sale of goods and services. During the course of our audit we have not observed any major weakness in the internal control.

(v) In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) To the best of our knowledge and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and having regard to our comments in paragraph (iv) above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

(vi) In our opinion and according to the information and explanations give to us, the Company has complied with the provisions of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order under the aforesaid Sections has been passed by the Company Law Board on the Company.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

(ix) In respect of statutory dues:

(a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty, were outstanding, at the year end for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, details of dues of sales tax, income tax, custom duty, wealth tax, excise duty, education cess which have not been deposited on account of dispute are as under

NATURE OF DISPUTE FOR THE YEAR AMOUNT (Rupees) AUTHORITY

1) Sales Tax 1997-98 10.35 Lacs Second Appellate (Hyderabad)

2) Service Tax 2005-2006 12.78 Lacs Service Tax Appellate 2006-2007 Tribunal west . zone (Ahmedabad)

(x) The Company does not have any accumulated losses at the end of the financial year and it has not incurred any cash losses during the current financial year and immediately preceding financial year.

(xi) Based on the audit procedures applied by us, and explanations provided by the management, the company has no dues towards banks, financial institutions or debenture holders, and hence, provisions of clause 4(xi) of the order are not applicable to the company.

(xii) Based on our examination of the records and the information and explanations give to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order. 2003 are not applicable to the Company.

(xv) The Company has not given guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company has not obtained any term loan during the year.

(xvii) According to the information and explanations given to us, and on overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment by the Company and vice-versa.

(xviii) During the year under consideration, the Company has made preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion, each of the transaction has been made at price; which are not prejudicial to the interest of the company.

(xix) According to the information and explanation given to us, the Company has not issued any debenture during the year and no outstanding at the year end.

(xx) As informed to us, during the period covered by our audit report, the Company has not raised any money by public issues.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true end fair view of the financial statements and as per the information and explanations given by the management, which have been relied upon by us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



FOR, ARVIND A THAKKAR & CO.

Chartered Accountants

Firm reg. no. 100571W

Place : Ditasan, Mehsana A.A. THAKKAR

Dated: 30-07-2010 Sole Proprietor

Membership No.14334



 
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